Treasurer Jim Chalmers says national GDP could see a slight impact as well.
Treasurer Jim Chalmers has revealed the economic cost the devastating floods in North Queensland will have on the country.
Chalmers, who is also a Queenslander, said that while the overall impact on inflation is not estimated to be substantial, the loss of crops could lead to price increases for bananas and sugar.
Treasury estimates that up to 20 percent of Australia’s banana crop could be impacted by the floods, potentially driving prices higher.
“The floods may also put some upward pressure on prices, but in quite a limited, narrow range of products,” Chalmers explained.
Further, from a more holistic perspective, the treasurer says the nation’s GDP growth could slow an additional 0.1 percent in the March quarter.
While this reduction may seem minimal, Chalmers stressed that any downturn in the current climate would be detrimental.
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“We expect lost economic activity due to the floods to reduce GDP in the March quarter by about 0.1 percent. That might not sound like a lot, but at a time when growth is not especially thick on the ground in our economy, another 0.1 percent of activity in the quarter we’re in now will make a difference,” Chalmers said.
Focus on Human Cost and Recovery
Amidst the economic concerns, Chalmers pointed to the human toll of the flooding, which has already caused significant disruption to communities.
Two people have so far been reported dead.
Torrential rainfall and flooding have led to power outages, forced evacuations, and the deployment of the Australian Defence Force to assist with critical infrastructure.
“Our primary focus is on the human cost of what’s happening there,” said Chalmers.
“We still have weather warnings, we still have communities severely impacted, we have roads cut. That has implications for supply chains and the delivery of groceries.”
The treasurer said the government was working closely with the state to support recovery.
“We have made it very clear to the Queensland government, with whom we are working very closely, that we will be there for the people of North Queensland and Far North Queensland when it comes to rebuilding their communities,” he added.
Chalmers assured that financial support would be made available for rebuilding efforts. On Feb. 6 Prime Minister Anthony Albanese visited the flood affected areas to take stock of the situation.
Meanwhile during a briefing, Queensland’s Premier David Crisafulli pledged to rebuild a “more resilient” infrastructure, and urged residents not to panic-buy.
“Some good has to come through this heartache … and that some good has to be in the form of: can we replace the infrastructure when it needs to be replaced, to a more resilient standard, and build in a greater ability to deal with what Mother Nature has to throw north and far north Queensland,” he said.
